Do you want to take on a franchise? You have an entrepreneurial spirit but don’t want to start from the ground up… perhaps the best small business franchise opportunities might be opportunities that you want to investigate further.
It is one the easiest ways to break into business without the start up challenges faced by new entrepreneurs. But it can be very costly and therefore inaccessible to most start up franchisees with little capital to outlay at the beginning.
Some franchises are advertised as low cost, but this is all relative to what you actually consider low cost….. they are still probably fairly costly unless you can take out a loan or save up for a few years. Its not something to walk into tomorrow, but should be considered very carefully with due diligence in respect to the financial aspects involved. However, franchises are very successful businesses if entered into following detailed scrutiny.
Upside of A Franchise
Seems fairly simple to take on a brand that is already being successful and running with it;
- Recognisable brand that will bring you traffic straight away.
- Business plan that is proven to work.
- Training on running the business.
- Capitalise on the market without having years of building it up.
Downside of a Franchise
- Not your branding.
- Not your business decisions.
- Expensive – this is the biggest barrier to overcome.
- Purchasing the franchise – this is an upfront payment, the franchise fee.
- Investment in the franchise – this covers the materials, labour etc to get you up and running.
- Investment going forward – this is the money you will need to run the business from day to day.
- Personal finances – some franchises demand that you have a certain amount of funds before you can purchase a franchise.
Franchises exist in almost any market from vending machines in underground stations to RV campsites in Montana…. There will be some that are affordable, maybe a coffeeshop that you go into every day or your favourite restaurant? But what franchise would suit your skills? and what would interest you, fill your with passion and drive everyday?
Some franchises offer variable levels depending on the level of franchise you want to take on… so that would mean variable assets needed, and different investment pathways, some are available for less than $10,000.
So you can imagine that a McDonald’s franchise will be particularly expensive. They have a reputation to uphold, a brand that is solid and will guarantee that you will be very successful and make money from it. You have to be a good businessman to run a successful fast food outlet but with the backing of McDonald’s, you will succeed… How much will it cost you ?
Well you’ll not have any change from $1,000,000.. Nice round figure but NOT what most of us have stashed in our banks!
Krispy Kreme Doughnuts
Now this is one for me… I love them ! Maybe not though, I might eat through all my profits ! The franchise fee for Krispy Kreme is $25,000 much more affordable but you still have to have a total investment of $275,000 – These top branded food companies are going to be on the expensive side, they have brand recognition, popularity and experience in the food sector.
This is another one I love… I die for their chicken biscuits and as I am not in the USA that frequently, it kills me that I can’t get one. I also love the fact they respect Sundays and do not open.
Now Chick-Fil-A is incredibly competitive, so not easy to get a franchise, in fact, their ‘franchise’ is slightly different from the regular ones. They do not allow you to own the restaurant, but rather you run it like a manager would, you are an ‘operative’ – you do not own or receive equity in the business so cannot sell it or pass it on. The company chooses the location, buys the real estate, constructs the restaurant and purchases equipment.
However they are very highly valued, and extremely hard to come by, because they only cost $10,000 making it so much more possible for a lot more people, around 75-80 new franchisees are given out a year, but over 20,000 aopply. They also demand that this is your sole focus, you cannot have any other businesses or interests the would detract from the outlet.
Where To Start
Evaluation of the investment is the prime direction here. You have got to know if you can make a living from it. Profitability is not an exact science but you have got to have a good idea of the projected profit.
How many franchises in your chosen niche opened in the last year?
Look at the number of new franchises still in business after a year.
Look at the average sales per franchise.
- Do your research
- Google your chosen franchise in depth
- Read reviews, especially corporation reviews
- Talk to other franchisees in the business
- Are they in any financial trouble? Any lawsuits?
- Have a business plan – Even though you might be taking on a reliable brand, you still need a business plan as part of your application process. You will need a business plan for your debt financing.
- Is it feasible in your neighbourhood/ location?
- This is the largest sector in franchising.
- Has an established record of success.
- Many opportunities in a wide range of outlets.
- It’s scalable.
- Always in demand, now trending towards healthier options, opening more doors to an even more diverse industry.
- Coffee is never going to go out of fashion, a very lucrative option – Cafe Lavista/ Mango Bean/ Smoothie Factory.
- This is the largest private sector employer.
- 1/3rd of consumer spending is through the retail and ecommerce sector.
- Growing market in mobile/cell commerce – so not necessarily needing a bricks and mortar store – social shopping and prepared to wait – could be done from home but website required.
- Investment is robust in the diverse opportunities.
Garden and Landscape
- Householders are more and more strapped for time, so businesses grown through outsourcing of garden maintenance.
- In the UK alone, adults spend around £1.5 billion per year on plants.
- Pet food market is worth £2.6 billion in the UK, more in the USA, a very lucrative sector to invest in.
- Pet owners are wanting better quality of life for their pets, so are becoming more discerning. Definte room for expansion.
Travel & Leisure
- Broad range of franchises from drones to serviced apartments from owner to manager.
- Leisure industry worth £177 billion and growing fast. We all spend on pleasure from dining out/restaurants/cafes/travelling abroad.
- Camping is a great American pastime, also in the UK.
- Sound and enduring investment.
- Good facilities for tents and RV’S with bbq and wifi.
- Kitchen washing facilities.
- There are over 30 million RV enthusiasts in the USA – a great investment.
Small Business Franchise Opportunities
These are only a small example of small business franchises available for a relatively small amount ( £10,000 on average)
- NKD Pizza
- Molly Maid – house cleaning
- Harry Ramsdens – fish restaurant
- Kumon – math teaching
- Incredible Ice Cream Company
- Healthy Feet
- Tubz Vending – sweets in pots
- AutoGlym – Car polishing
- Chesters – fast food
- Little Kickers – preschool football
- Anago – cleaning systems
- Building Stars – offer different investment pathways.
- Mosquito Squad
- Cruise Planners
Taking up a franchise is not something you can take up tomorrow and the thought might be intimidating. it requires planning, not only how to fund the purchase, but the planning of the business. Whilst you can walk into the brand and customer base, you still need to be prepared for the hard work ahead but in most instances, with the premise that it will be a job for life, that is exactly what you can make it. So choose wisely, a profession that you have a passion for, not one that is merely a whim.
The purchase of a franchise can be a realistic possibility, if approached in a practical way, it can be affordable for a budding entrepreneur.
If you want to start by building a website, perhaps to promote your franchise or as a way to build up funds to purchase one, follow my link below to learn how I, along with Wealthy Affiliate can help you do this.